"They're sure drifting that way," Murkowski said Wednesday. "You've got to face facts when you inherit a bad deal. You've got to figure out what you can possibly do with it."

Murkowski said former Gov. Tony Knowles' administration did not adequately study the feasibility of the fast ferries before approving the purchase of the Fairweather and the Chenega. The ferries, which can hold 250 passengers, make sense only if they are carrying enough passengers, Murkowski said.

Last Thursday, there were 28 or fewer passengers on the fast ferries' relay run from Juneau to Ketchikan, said Department of Transportation spokesman John Manly.

"Those ships are designed for high-density runs, and we don't have high-density runs for nine months of the year," Murkowski said.

Murkowski spoke about the ferries Wednesday during a rare, wide-ranging question-and-answer session with members of the capital press corps.

In the session, he discussed the departure of seven top employees of his Department of Natural Resources and the state's purchase of a jet plane, among other topics.

Alaska has an option to buy a third and a fourth fast ferry at a cost of about $40 million apiece, but Murkowski said it is doubtful the state would exercise those options.

Emily Ferry, coordinator of the Alaska Transportation Priorities Project, said the ferries have not been given a chance in the places they were meant to run, such as Prince William Sound.

The Chenega spent just two weeks in the fall shuttling passengers between Cordova, Valdez and Whittier before being transferred to Southeast Alaska for the winter.

"I think it's an experiment that was designed to fail, at least in the way the current administration has been operating the ferry system," Ferry said.

Murkowski also said Wednesday that the ouster of Natural Resources Commissioner Tom Irwin and the subsequent resignation of six top-tier department employees have not changed or slowed natural gas contract negotiations with three North Slope oil producers.

"Clearly, we are on target. We haven't lost any momentum," Murkowski said

Irwin was suspended and then removed from his position last month after he sent a memo to Attorney General David Marquez questioning the legality of some of the state's positions in the pipeline negotiations, and whether the state was giving away too much in the deal.

The main difference of opinion, Murkowski said, was with Point Thomson's gas reserves.

The state for decades has been trying to get Point Thomson's vast reserves of natural gas out of the ground. Former Oil and Gas division chief Mark Myers last month rejected Exxon Mobil's development plan for the 106,200 acres, found the company in default and threatened to pull the Point Thomson leases.

Exxon Mobil's plan said developing Point Thomson is not possible without first changing the state's tax and royalty laws and the company proposed folding Point Thomson's development into the gas pipeline fiscal contract now being negotiated with the state.

Irwin brought up Point Thomson as one of his concerns in his memo. Myers was one of the six who resigned in the wake of Irwin's departure.

"There was a legitimate difference of opinion on where Point Thomson would roll in. Let's leave it at that," Murkowski said Wednesday.

Murkowski also defended the state's purchase of a 1984 Westwind II jet, which he will use for official trips when the Department of Public Safety is not using it to transport prisoners. The $2.6 million jet arrived in the state Tuesday and was carrying prisoners to an Arizona prison where it leases space on Wednesday.

"Alaskans recognize that this is a big state, and the logic of having a practical, utility-type aircraft is clearly in the interest of the state, the Department of Public Safety and the governor," he said.

Critics have called the jet a luxury item for the governor. Murkowski dismissed them as political opportunists.